Industry Rival: 'Zynga Is Burning To The Ground'Has Hands Full With FarmVille 2 Success, Legal Issues And Poor Earnings |
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FarmVille 2 is still exploding on Facebook since its September launch — now at 50.6 million players — but San Francisco-based Zynga Inc. remains on the ropes.
It seems more and more likely that real-money gambling, especially poker, is the future for the once-upon-a-time profit machine The free-falling public firm that latched onto Facebook’s meteoric rise and subsequent stagnation keeps getting stomped on by the business world.
This week is no different.
In the soap opera of the “social” gaming sphere, Zynga and Kixeye, an online strategy games maker, are engaged in a legal battle that seems to be boiling over as of late.
The chief executive of Kixeye, Will Harbin, was quoted by Venture Beat as saying: “Zynga is burning to the ground and bleeding top talent and instead of trying to fix the problems — better work environment and better products — they are resorting to the only profit center that has ever really worked for them: their legal department. It is simply another case of Zynga vindictively persecuting a former employee as an individual.”
His vitriol is in response to Zynga pursuing legal action against Alan Patmore, its former landlord of CityVille, for allegedly stealing a treasure trove of the company’s proprietary information before joining Kixeye. Patmore jumped ship this summer.
According to All Things Digital, Zynga claims that Patmore has admitted taking the files.
Zynga Poker, perhaps the firm’s most valuable item in its portfolio, claims 37.8 million “monthly users” and could be a valuable database for a Nevada casino company to gobble up through a partnership. The software is perhaps less important. Zynga and Wynn Resorts, owned by billionaire Steve Wynn, have been in talks about a deal.
Online poker is legal in the United States only in Nevada and Delaware.
Some of the other products Zynga offers are facing intense ridicule. Harbin continued in his rant by saying that the firm makes “asynchronous cow clicking games” — in reference to FarmVille, a game that has milked time from millions of Facebook users. Nonetheless, it’s still popular.
According to Business Insider, a legitimate possibility exists of the company going private. Its stock price is down to just about $2, after peaking at near $15 earlier this year. The firm still does $1 billion in sales, but apparently just doesn’t reap profits.
The benefit of no longer being publicly traded? Zynga can work through its plans for saving the company behind close doors, and if it screws up, it won’t face nearly as much scorn. The company has already begun lobbying for online-gaming legislative efforts.
A move into real-money online poker would represent a separation from Facebook, one that many predict is needed for Zynga to stay relevant in the addicting-games business. The chances of Facebook ever dabbling in deposit-based gambling in the U.S. seems remote.
Widespread play on mobile devices is seen as another savior for Zynga, a business model that the online gambling industry will also look to capitalize on going forward.
Follow Brian Pempus on Twitter — @brianpempus
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